Now Reading: Senco Gold shares crash 14% on weak Q1 margins
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Senco Gold shares crash 14% on weak Q1 margins
Senco Gold shares fell 14.5% on Wednesday to a four-week low of Rs 343 apiece after the jewellery retailer reported a 67% jump in revenue to Rs 3,056 crore for Q1 FY27.…
The Story in Brief
Senco Gold shares fell 14.5% on Wednesday to a four-week low of Rs 343 apiece after the jewellery retailer reported a 67% jump in revenue to Rs 3,056 crore for Q1 FY27. Retail sales rose 50% year-on-year to Rs 2,651.5 crore, and same-store sales grew 39%. Despite the topline surge, EBITDA margin shrank from 10.1% to 7% because of heavy discounts and old-gold exchange schemes that accounted for 43% of sales. Net profit slipped 3% year-on-year to Rs 101 crore, with the PAT margin at 3.3%.
The company blamed the margin pressure on higher customs duty (raised from 6% to 15%) and elevated gold prices, which it countered with marketing initiatives including a '0% deduction' exchange campaign. Diamond jewellery sales rose 43% by value and 18% by volume. Management has guided for 20%+ value growth in FY27 and an EBITDA margin of 7.5-7.8%. The stock remains 40.5% below its record high of Rs 772.
The Indian Opinion
The market is fixated on the margin squeeze in Senco Gold’s Q1, but that ignores how a sharp customs duty hike and elevated gold prices forced the company to run aggressive old-gold exchange schemes. Those schemes drove 43% of sales and kept same-store growth at 39%. The real test is not this quarter’s profit dip but whether management can deliver the guided 7.5-7.8% EBITDA margin in Q2. If they do, today’s 14% plunge will look like an overreaction.
Source: livemint.com
This story was synthesised by AI from the source linked above.
